Senate Expected to Pass Bush-Friendly Tax Cut Plan; Texas Democrats Still at large as Deadline for Legislature Looms

Aired May 15, 2003 - 16:00 ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

(BEGIN VIDEOTAPE) ANNOUNCER: Your tax dollars on the line. Will a Senate marathon of votes reap political dividends for President Bush?

Rebel Texas Democrats stand their ground in Oklahoma, at least until tomorrow, with encouragement from an outlaw.

GOV. GRAY DAVIS (D), CALIFORNIA: I thought this town needed a little good news.

ANNOUNCER: So could Governor Gray Davis. California's finances are in crisis and so is his political career.

Now, live from Washington, Judy Woodruff's INSIDE POLITICS.

(END VIDEOTAPE)

JUDY WOODRUFF, CNN ANCHOR: Thank you for joining us.

Well, after all the arm twisting and barnstorming to promote tax cuts, President Bush is expecting to see the payoff today in the United States Senate.

Our congressional correspondent Jonathan Karl has the latest on the vote and the wavering Democrat who swung Mr. Bush's way. So, Jon, some action up there.

JONATHAN KARL, CNN CONGRESSIONAL CORRESPONDENT: Absolutely, Judy, the Senate has been voting since early this morning on that marathon list of amendments to the tax plan. The voting is still going on now, but when all is said and done today, it is expected that the president will have a significant, not a complete, but a significant victory that would not have been possible without the support of at least some Democrats.

(BEGIN VIDEOTAPE)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Let's not wait. Let's get tax relief to the American people as quickly as possible.

KARL (voice-over): The president aggressively courted Democrat Ben Nelson of Nebraska, personally campaigning for the tax cut in Omaha earlier this week. Nelson, however, insists his support has nothing to do with White House pressure.

SEN. BEN NELSON (D), NEBRASKA: I don't mean to in any way demean the presidency, but it's not about pressure from the White House or anything like that. It's about the contents of the plan, because I think that's what's the most important part of what we're doing here.

KARL: Republicans won Nelson's backing by agreeing to include $20 billion in aid to cash-strapped state and local governments. Nelson's support enables Republicans to completely eliminate the tax on dividends, the White House's highest priority. But they had to use some creative accounting to fit that into a tax plan that cost less than half the president's original proposal. Under the Senate bill that is expected to pass, the dividend provision would last just four years. And the bill includes approximately $90 billion in so-called offsets, effectively tax increases to keep the cost of the overall bill at $350 billion.

One moderate Democrat who supported a different Bush tax cut two years ago is dead set against this one. Mary Landrieu has warned fellow Democrats they won't get anything out of working with the White House.

SEN. MARY LANDRIEU (D), LOUISIANA: You better make your decision based on whether this package works for the people of your state, whether it's Nebraska or Arkansas or Ohio. Don't think that you're going to help, quote, "the president" and he or the White House is going to come help you, because it's not going to work. It didn't work in Louisiana. It doesn't work that way.

KARL: After supporting the president's tax cut in 2001, Landrieu was still the target of an all-out campaign by the White House against her reelection in 2002.

(END VIDEOTAPE)

KARL: Now, Judy, it's not over yet here. There may still be some very close votes, including on that dividend provision, where the vice president may need to be on hand to cast the tie-breaking vote. But it is expected the Republicans ultimately will prevail today. Even that's not the end of the road, though, because they still have to reconcile the differences between the Senate bill and the House bill that was passed earlier. The House tax cut, as you know, was bigger than the Senate plan that they are talking about here. At the end of the day, it is expected that the final tax bill will actually be even bigger than what passes today - Judy.

WOODRUFF: So, a lot of string left to play out on all of this.

KARL: Yes.

WOODRUFF: Jon Karl, you're going to keep watching it, thank you, Jon.

Now, we turn to the state of Texas, where State House business remains paralyzed and most Democratic seats still are empty. But rebel lawmakers who fled across the border say that they will soon declare victory. Once the clock runs out on their showdown over congressional redistricting.

CNN's Ed Lavandera is in the Texas capital of Austin. And, Ed, those Democrats they said they were going to stay out of the state until the vote, and that's what they're doing. Or until the deadline, I should say.

ED LAVANDERA, CNN CORRESPONDENT: Absolutely. And it looks like they've got about eight hours left. There are still plans in the work as to exactly when it is the Democrats will be returning to Austin. We've been inside the state capital today. The House floor is empty. It's been that way since Friday, as many House members who are still here can only work on committee -- working in committee sessions. That's all they can do up to this point. But the Democrats, up in Ardmore, Oklahoma, say they are ready to return. And as one state Democratic official told us today, they're planning to put on a big show, because this is Texas and we like things hot and spicy.

(BEGIN VIDEO CLIP)

CRAIG EILAND (D), TEXAS STATE HOUSE: Now that we have been able to kill redistricting, we are ready to go back and to finish the business of this state. We stand ready, willing and able to work with our Republican colleagues to finish the budget, to finish school finance, and to finish the remaining issues.

(END VIDEO CLIP)

LAVANDERA: Now, there are a little over 50 Democrats who have left the state to fight this redistricting bill that we've been talking so much about over the last couple days. But not all of the Democrats in the State House here in Texas left the state. There are about seven that are still left behind. Most of those Democrats are African-American representatives here in the state, and they were in favor of this redistricting bill, Judy, because it would have created an extra seat in Congress in an African-American district. One of the representatives we speak with today, Ron Wilson a Democrat of Houston, says that the Democrats in Oklahoma better hope that their chairs are still on the House floor when they return.

(BEGIN VIDEO CLIP)

LAVANDERA: Do you think there is going to be retribution for them? Are they going to have problems when they come back? There's still time left in the session.

RON WILSON (D), TEXAS STATE HOUSE: There's a long time left. I'm not going to say...

LAVANDERA: Don't by shy.

WILSON: I'm not say there's going to be retribution, but there's going to be a natural, I think, tension. I think if they come back and assume that everything's going to be hunky dory, I think they're mistaken.

(END VIDEO CLIP) LAVANDERA: Now, one of the House members that's going to go a long way to smoothing things over between Republicans and Democrats here in Austin is the speaker of the House, Tom Craddick, he says that these Democratic moves have cost the life of about 400 to 500 bills. And will end up costing the state $600 to $700 million. But they say, it will be up to the Democrats to smooth things over. And he doesn't anticipate any problems for them.

(BEGIN VIDEO CLIP)

LAVANDERA: What has this done to the reputation of Texas politics? What to you think?

TOM CRADDICK (R), TEXAS HOUSE SPEAKER: Well, I think it's harmed it. I don't think there's anything else you can say but that. We're on the late night talk shows and things like that. And I think that harms the image of the state overall.

(END VIDEO CLIP)

LAVANDERA: So the word now is about eight hours left until this deadline is passed and the redistricting bill will be killed, at least for this session and everyone here is awaiting the return of the Democrats back to Austin - Judy.

WOODRUFF: Ed, thanks very much. Very interesting the African- American Democratic members supporting a plan that would have advantaged the Republicans. Thanks very much. Appreciate it. Ed Lavandera reporting from Austin.

Well, those AWOL Democrats found some comfort and humor in a note of support they got last night from a famous Texan.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: We haven't heard from the governor and we haven't heard from our house speaker, but we did hear from a powerfully important Texan from Willie Nelson. Way to go. Stand your ground.

(END VIDEO CLIP)

WOODRUFF: In addition to that note, singer and song writer Willie Nelson sent the Texas 51 some of his trademark red bandanas, which you can see them wearing around their necks, or some of them put them in their pockets.

Well, politicians here in Washington are used to angry partisan wrestling matches but it hasn't always been that way in Texas.

Our Bruce Morton looks at the change of tone in the president's past and current political stomping ground.

(BEGIN VIDEOTAPE)

BRUCE MORTON, CNN CORRESPONDENT (voice-over): As a candidate here with the Texas legislature in 1999, George W. Bush used to talk about making Washington more like Austin.

BUSH: Republicans and Democrats have worked together too do what is right for the people we represent.

MORTON: Well, he did it, sort of. Austin and Washington are more alike, both meaner and more partisan than ever. In Texas, Democrats infuriated by a congressional redistricting plan pushed by U.S. House majority leader Tom DeLay, a Texan, walked out and set up camp in a Holiday Inn in Oklahoma, just across the border.

MORTON: The Republicans control both houses of the Texas legislature now. And columnist Mollie Ivans, admittedly no fan, writes, "They think it's them against evil, and anybody who ain't them is evil, these are Shiite Republicans. Unquote. In Washington, almost everybody agrees the National Congress is more partisan than ever too, more emphasis on loyalty, less on independent thought.

Mr. Bush visited Ohio and Maine, whose Republican senators disagreed with his tax cut to urge support for it. Senate Republicans want to change the filibuster rule so that the president's judicial nominees get voted on. Retired Democratic Congressman Lee Hamilton tells about how he missed up a bill as a freshman and was saved when a Republican who opposed the bill told him his mistake and how to fix it. Happen today, no way?

MORTON (on camera): One reason is Congress does its important business during a three-day week, Tuesday through Thursday. Then the members go home, raise money, politic, whatever. They don't get to know their colleagues. Years ago, two members might argue bitterly over an issue then go out and have a drink or supper together and find themselves on the same sides of some other issue a few days later. Those days are over. In Washington, in Austin, the partisans rule. Tom DeLay's nickname is "The Hammer." He's earned it.

Bruce Morton, CNN, Washington.

(END VIDEOTAPE)

WOODRUFF: Well, as the Senate writes the next chapter in the tax cut debate, what will be the political bottom line for president bush? Bay Buchanan and Donna Brazile will face off on taxes, the Texas House standoff and guns.

And are fuming smokers in New York City trying to light a fire under their mayor?

(COMMERCIAL BREAK)

WOODRUFF: Things are anything but golden these days for Gray Davis. Could California's governor actually lose his job? We'll tell you about a brewing West Coast recall.

INSIDE POLITICS back in a minute.

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WOODRUFF: With us now, former Gore campaign manager Donna Brazile, joining us from Nashville today. And with me in Washington, American Cause president Bay Buchanan.

Donna, let me start with you. Texas Democrats they walked out on the State House rather than vote for a redistricting plan they didn't like. Does this make them look silly, or is this something serious on their part?

DONNA BRAZILE, FMR. GORE CAMPAIGN MGR.: Judy, they're being called the patriots of 2003. They deserve a great deal of credit for walking out, rather than standing in that partisan power display down in Texas. I hope they continue to stand up to those tactics and not serve as a photo op for the Republicans down there who should be fixing the budget. Rather, they are trying to overturn the election. We've heard that story before, right, Bay?

BAY BUCHANAN, AMERICAN CAUSE: And we won that round, Donna.

BRAZILE: Go ahead.

BUCHANAN: I'll be honest. Everybody likes political theater. This is a creative way to have a minority actually be able to stop the progress of legislation which they weren't supporting. And so everybody's laughing and it's good fun. And I don't think they'll be harmed by it at all, but they can only do this once. You can't do this every other week. This is the first time in 130 years that the Republicans controlled that legislature down there. They're going to be ready to do more and more that the Democrats don't like, and they're going to have to get used to it.

WOODRUFF: The assault weapons ban, a lot of talk about it. It doesn't expire until the end of next year, but we're already hearing about. Right now, Donna, the gun owners of America, this group, is saying the president is pursuing a dangerous strategy by, in their words, trying to have it both ways. Are they right? Is this risky what President Bush is doing by saying I'm for it, but I'm not going to lobby for it.

BRAZILE: Well, first of all, I think the president should lobby to extend it. He promised on the campaign trail in 2000, I remember that day, when he said he would extend it. He would renew it if he became president. So he should not only extend it. He should go one step further and improve it and make it stronger, so that we can keep these guns out of the hands of terrorists and out of the hands of juveniles and on our playgrounds.

BUCHANAN: You know, there's two issues here. Judy, one is the politics of it, and I believe the president is wise. Tom Lay has told him, his lieutenant up there on the hill, he doesn't have the votes. And so why should he push for something he's not going to get, and all he's going to do is offend his natural base. So it's good politics to say, listen, I'm not in favor of this. However, I can't stop and prevent it. I've got other things I need to do that are more important right now.

And the second issue is, Donna's completely wrong. Crime in this country is not committed by these kind of weapons. These are including hunting guns.

BRAZILE: So, whey don't we ask those victims here in the Washington suburbs, Bay, if they want to see these weapons banned. There are 19 such weapons. There are over 600 sporting guns. I know because I'm an avid sportswoman. There are over 600 guns that you can go out there and purchase to go out and do all of the hunting you want to. This is 19 uzies, AK-47s. They should be banned. They should not be allowed in the hands of criminals, juveniles and terrorists.

WOODRUFF: Bay, last word.

BUCHANAN: Donna, the key here is you live in Washington, D.C., my hometown. They've banned all guns there. Certainly hasn't stopped any crime there, has it?

BRAZILE: It has not worked yet, Bay, but we hope these guns don't get back on our streets.

BUCHANAN: Criminals always got 'em. We want to make certain the rest of us can get them.

WOODRUFF: Very quickly to tax cuts, Donna, the Senate is haggling at this hour over how big it's going to be. Clearly, the president is going to get something. Donna, is whatever he gets, whether it's closer to 726 or 350 billion, is this going to be a victory for the president?

BRAZILE: Well, the president will take the victory, even if it's two dollars I believe. But this is a poison pill for the American economy. And I think that this tax cut is going to cause long-term damage to our economy and getting America growing again.

BUCHANAN: You know, the wonderful thing is that he didn't have the votes in the Senate. That was quite clear, but it looks as if the president in the last couple days has gone around the country and really made a difference. He will get total credit if this bill goes through. And as long as its strong enough so there can be an incentive for jobs in this country, we'll all benefit.

BRAZILE: Bay, they've already created $1.3 trillion tax cut. It has not created one job. Not one job has trickled down in the hands of anybody.

(CROSSTALK)

WOODRUFF: We always benefit from having both of you. Bay Buchanan, Donna Brazile, great to have you. We'll see you next week.

BRAZILE: Thank you. BUCHANAN: Thank you.

WOODRUFF: Up next, the taxing issue that changed John Kerry's campaign plans.

Plus, money troubles are creating political problems for big state governors on both coasts and of both parties. We'll find out how they are handling the stress ahead.

(COMMERCIAL BREAK)

WOODRUFF: Checking the headlines in our "Campaign News Daily," Senator John Kerry had planned to unveil his health care plan today in Iowa. Instead, he's back here in Washington to vote on the tax cut bill. Senator Kerry, along with fellow senators and White House hopefuls Joe Lieberman, John Edwards and Bob Graham, are all on the Hill ready to cast their no votes on the GOP plan. Kerry's health care speech now is scheduled for tomorrow in Iowa.

Senator Lieberman wants to hold more debates with his fellow Democratic hopefuls. The Lieberman campaign has sent letters to the other eight candidates proposing one televised debate a month until the nomination is decided, starting in July. The leaders of the centrist Democratic Leadership Counsel are taking aim at Howard Dean. In a memo, group founder Al Fromm and former Clinton aid Bruce Reid say Dean belongs to what they call the McGovern-Mondale wing of the Democratic Party. That's the wing, they say, that lost 49 states in two elections and transformed Democrats from a strong national party into a much weaker regional one. Howard Dean, for his part, has said repeatedly that his stands on the key issues are in step with most Americans.

INSIDE POLITICS returns in a moment.

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WOODRUFF: It's hard to believe that things could get politically much worse for California Governor Gray Davis. He just proposed new tax hikes and painful new cuts in state spending. And earlier today a committee formed to recall the governor planned to turn in several thousand signatures. Part of an effort to recall the governor who was just reelected last November.

Here now, CNN's Charles Feldman.

(BEGIN VIDEOTAPE)

CHARLES FELDMAN, CNN CORRESPONDENT (voice-over): Listen to what will either prove to be the boldest or dumbest move by California Governor Gray Davis, who announced Wednesday his plan for dealing with an enormous $38.2 billion budget deficit.

DAVIS: I'm proposing a half cent sales tax to finance the current year deficit, which we anticipate being about $10.7 billion. I'm proposing roughly $1.8 billion in total made up partially of an increase in the cigarette tax and partially of a new category for the personal income tax for the most affluent taxpayers.

FELDMAN: The governor's tax increase plan comes at a time when some 100,000 signatures have already been gathered, calling for the governor's recall. It takes about 900,000 to get the measure on the ballot.

FELDMAN: And what exactly do the latest numbers show? We asked the director of the field poll.

MARK DICAMILLO, DIR. FIELD POLL: Forty six percent say that they would vote to recall the governor now. Forty three percent say they would not. And what's significant to me is that 28 percent of Democrats say they would vote to recall the governor. So I think he's in a very vulnerable position.

FELDMAN: how did the second term governor, who was just reelected in 2002, get himself into this mess?

SAL RUSSO, RECALLGRAYDAVIS.COM: It really began in voters' minds when Gray Davis, after the election was over, admitted we had a $35 billion budget deficit, when during the campaign he assured everybody that he had the budget under control.

FELDMAN: A recall election in California means a two-part ballot with voters getting to say yes or no to Gray Davis while also choosing a new governor. Republican Congressman Darryl Isaa is backing the recall effort, and has made no secret of the fact he'd like voters to then choose him to replace Gray Davis. Governor Davis declined repeated requests to talk about the recall movement with CNN.

(on camera): What Gray Davis has going for him is that no recall effort has ever succeeded in this state. Now, what Gray Davis has going against him is a recent poll that gives him the distinction of being the most unpopular governor in California history.

Charles Feldman, CNN, Los Angeles.

(END VIDEOTAPE)

WOODRUFF: Meanwhile, on the other side of the country, in New York, Republican Governor George Pataki has his own problems. The state legislature in New York has overridden now all 119 budget vetoes that Pataki made just yesterday. In the process, they restored $1.3 billion in spending, and they increased the state's income and sales taxes. Now, this is a split legislature. One house controlled by Republicans and the other is Democrat. It is the first time since 1982 that the New York legislature has mustered enough votes to override a governor's veto of a state budget.

Well, New York City's mayor has been under fire as well. Up next, some angry smokers are making Michael Bloomberg the butt of their jokes. (COMMERCIAL BREAK)

WOODRUFF: And, finally, opponents of New York City's ban on smoking in restaurants and bars are venting their anger at Mayor Michael Bloomberg in a unique way. They're selling ashtrays on the Internet that show Bloomberg's face and the motto, "You can fight city hall." These people love to smoke.